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United States : REVLON plans to expand its fragrance & skincare business with the acquisition of ELIZABETH ARDEN
Publish Date : 22-Jun-2016
The globally acclaimed cosmetics maker Revlon Inc. has announced strategy worth $870 million for the acquisition of Elizabeth Arden Inc in a bid to cement its fragrance and skincare business further and increase its market footprint in the Asia-Pacific region.
Revlon has made an announcement on this acquisition within half-year of its majority shareholder Ron Perelmans statement on its search for strategic alternatives for the company to help it race with rival players such as LOreal SA and Estee Lauder Cos Inc.
After news on this deal emerged, the shares of Elizabeth Arden jumped by 50% to $13.96 and then finally settled at $14 apiece.
The announcement on the acquisition was also encouraging for the Revlon shares, which rose slightly to $31.30.
Elizabeth Arden is a key player in the luxury skincare market segment, chiefly in the anti-aging space with brands like Prevage, SuperStart and Ceramide. The company, in the fragrance space, has licenses from icon such as Taylor Swift, Justin Beiber and Britney Spears.
Revlon, on the other hand, is an established name in the color cosmetics and hair color market segments. The company distributes its products chiefly through mass retail channels and beauty salon operators.
Meanwhile, Bank of America Merrill Lynch and Citigroup Global Markets Inc. have made pledge for around $2.6 billion to support the acquisition and refinance the debt of the both cosmetic manufacturers.
Revlon, exclusive of the acquisition cost, has estimated this years net sales to hover between $2 billion and $2.1 billion.
The companys estimated figure represents a high single-digit growth rate, and this is encouraging for Revlon, as it has failed to record projected revenue in the last six quarters out of eight.
